Whenever the marginal cost curve lies below the average total cost curve, the:
A) average variable cost is increasing.
B) average variable cost is decreasing.
C) average total cost is increasing.
D) average total cost is decreasing.

Question

Quizplus · Accepted Answer

When the marginal cost is below the average total cost, it pulls the average total cost down, causing it to decrease.

Whenever the Marginal Cost Curve Lies Below the Average Total